2009 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

9-14-2009

Twp of Tinicum v. Dept of Transportation

Precedential or Non-Precedential: Precedential

Docket No. 08-1830

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Recommended Citation

"Twp of Tinicum v. Dept of Transportation" (2009). 2009 Decisions. Paper 542.

http://digitalcommons.law.villanova.edu/thirdcircuit_2009/542
 Honorable Marvin J. Garbis, Senior United States District *

Judge for the District of Maryland, sitting by designation.

 PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

_____________

No. 08-1830

_____________

TOWNSHIP OF TINICUM, DELAWARE COUNTY,

PENNSYLVANIA,

 Petitioner 

v.

UNITED STATES OF AMERICA DEPARTMENT OF

TRANSPORTATION,

OFFICE OF THE SECRETARY, WASHINGTON, D.C.

 AIR TRANSPORT ASSOCIATION OF AMERICA,

INC.;

 AIRPORTS COUNCIL INTERNATIONAL-NORTH

AMERICA,

 

Intervenors

 (Pursuant to Clerk Order dated 4/28/08)

On Petition for Review of an Order of the 

United States Department of Transportation

Order 2008-3-18

Argued January 6, 2009

Before: CHAGARES and HARDIMAN, Circuit Judges, and

GARBIS , District Judge. *
2

(Filed: September 14, 2009)

Francis G.X. Pilleggi (argued)

Sheldon K. Rennie

Sophia Siddiqui

Fox Rothschild

919 N. Market St.

Citizens Bank Ctr., Ste. 1300

Wilmington, DE 19801

Counsel for Petitioner

Dale C. Andrews

Paul M. Geier

Mary F. Withum (argued)

U.S. Department of Transportation

Office of General Counsel

1200 New Jersey Ave, S.E.

Washington, DC 20590

Robert B. Nicholson

Robert J. Wiggers

U.S. Department of Justice

Appellate Section

950 Pennsylvania Ave., N.W.

Washington, DC 20530

Counsel for Respondent

M. Roy Goldberg (argued)

Sheppard, Mullin, Richter & Hampton

1300 I St., N.W., 11th Fl. E.

Washington, DC 20005

Vincent A. LaMonaca

J. Denny Shupe

Schnader Harrison Segal & Lewis

1600 Market St., Ste. 3600

Philadelphia, PA 19103

Counsel for Intervenor Air Transport Association of America,

Inc.
3

Scott P. Lewis

Douglas H. Wilkins

Anderson & Kreiger

1 Canal Park, Ste. 200

Cambridge, MA 02141

Counsel for Intervenor Airports Council International-North

America

_____________

OPINION OF THE COURT

_____________

CHAGARES, Circuit Judge.

This case requires us to determine whether a municipality

may, consistent with the Anti-Head Tax Act (“AHTA”), 49 U.S.C.

§ 40116, require airlines to pay a tax every time one of their flights

lands within the municipality’s borders. Tinicum Township

(“Tinicum”) enacted an ordinance establishing just such a tax.

Airline industry groups complained to the Department of

Transportation (“DOT”), arguing that the tax violated the AHTA.

The DOT agreed with the industry groups and issued a declaratory

order invalidating the ordinance. Tinicum filed a petition for

review, and we will deny that petition.

I.

The City of Philadelphia (“City”) owns and operates the

Philadelphia International Airport (“Airport”). Some of the

Airport’s runways, however, are located within Tinicum’s borders.

About fifty years ago, a dispute arose over whether Tinicum could

charge the City property tax for the Airport’s use of that land.

Rather than litigate the matter to completion, Tinicum and the City

settled. The City agreed to make periodic payments to Tinicum in

exchange for continued runway access. But that agreement expired

– and the payments, which amounted to as much as $1.1 million

per year, stopped – in May 2007. Unable to reach a new agreement

with the City, on June 18, 2007 Tinicum enacted Ordinance 2007-

809, which provides:
4

[T]here shall be imposed upon all aircraft users a privilege

fee . . . for use of property located within Tinicum

Township for landing of aircraft [of] $.03 per one thousand

(1,000) pounds of part thereof of approved maximum

landed weight. Fees will be determined by weight listed in

the Federal Aviation Administration [(“FAA”)] type

certificate data sheet.

Appendix (App.) 26-27. 

The ordinance became effective on July 18, 2007. App. 28.

Over the course of the next month, passenger airlines (including

United, Southwest, and Delta) and parcel shippers (including

Federal Express and United Parcel Service) landed flights at the

Airport on runways located within Tinicum, but refused to pay the

tax. The Air Transport Association (“ATA”) and the Air Carrier

Association of America (“ACAA”), industry groups whose

membership includes many of those carriers, petitioned the DOT

to review the ordinance and invalidate it on the ground that it

violated the AHTA. After receiving written submissions from

ATA, ACAA, Tinicum, and other interested parties, the DOT

issued an order agreeing with the industry groups and declaring the

ordinance invalid. Tinicum then filed a petition for review of the

DOT’s administrative order. ATA and the Airports Council

International-North America (“ACI-NA”), a coalition of local

governments that own and operate airports, entered the case as

intervenors, urging the denial of Tinicum’s petition for review.

II.

The DOT had subject matter jurisdiction over the ATA and

the ACAA’s petition for a declaratory order pursuant to 49 U.S.C.

§ 40113(a). This Court has subject matter jurisdiction to review

the DOT’s declaratory order pursuant to § 46110(a) and (c).

The DOT is charged with administering the AHTA. See

Nw. Airlines, Inc. v. County of Kent, Mich., 510 U.S. 355, 366-67

(1994) (“The Secretary of Transportation is charged with

administering the federal aviation laws, including the AHTA.”).

We therefore review the DOT’s interpretation of that statute using
5

the framework established in Chevron U.S.A., Inc. v. Natural

Resources Defense Council, Inc., 467 U.S. 837 (1984):

First, always, is the question whether Congress has directly

spoken to the precise question at issue. If the intent of

Congress is clear . . . the court . . . must give effect to th[at]

unambiguously expressed intent . . . . [I]f the statute is

silent or ambiguous with respect to the specific issue, the

question for the court is whether the agency’s answer is

based on a permissible construction of the statute.

Id. at 842-43.

III.

In 1970, Congress enacted federal head taxes – uniform,

per-person tolls – on airplane passengers in order to raise money to

help states and municipalities develop local airports. See Aloha

Airlines, Inc. v. Dir. of Taxation, 464 U.S. 7, 8-9 (1983)

(discussing federal efforts to assist local airports). In 1972, the

Supreme Court in Evansville-Vanderburgh Airport Authority

District v. Delta Airlines, Inc., held that states, too, may enact head

taxes on interstate air travel. 405 U.S. 707, 716-17 (1972). The

Court explained: 

At least so long as the toll is based on some fair

approximation of use or privilege for use [of a state

facility], . . . and is neither discriminatory against interstate

commerce nor excessive in comparison with the

governmental benefit conferred, it will pass constitutional

muster, even though some other formula might reflect more

exactly the relative use of the state facilities by individual

users.

Id. 

Congress became concerned that the Court’s decision

opened the floodgates for a hodgepodge of local head taxes

and similar taxes that could complicate interstate air travel.

See County of Kent, 510 U.S. at 363 (discussing Congress’s

perception of Evansville-Vanderburgh). So, in 1973,
6

Congress enacted the AHTA, 49 U.S.C. § 1513, which

prohibited a wide array of state head taxes and other

functionally similar tolls. See id. Congress has since

amended the statute several times, and it is now codified at

§ 40116.

Immediately prior to recodification at § 40116, the AHTA

provided:

(a) Prohibition; exemption. No state (or political

subdivision thereof . . .) shall levy or collect a tax, fee, head

charge, or other charge, directly or indirectly, on persons

traveling in air commerce or on the carriage of persons

traveling in air commerce or on the sale of air transportation

or on the gross receipts derived therefrom . . . .

(b) Permissible States taxes and fees. Except as provided in

subsection (d) of this section [prohibiting certain tolls

deemed to unreasonably burden interstate commerce],

nothing in this section shall prohibit a State (or political

subdivision thereof . . .) from the levy or collection of taxes

other than those enumerated in subsection (a) of this

section, including property taxes, net income taxes,

franchise taxes, and sales or use taxes on the sale of goods

or services; and nothing in this section shall prohibit a State

(or political subdivision thereof . . .) owning or operating an

airport from levying or collecting reasonable rental charges,

landing fees, and other service charges from aircraft

operators from the use of airport facilities.

. . . .

(f) Flight takeoff or landing requirement for State taxation.

No State . . . or political subdivision thereof shall levy or

collect any tax on or with respect to any flight of a

commercial aircraft or any activity or service on board such

aircraft unless such aircraft takes off or lands in such State

or political subdivision as part of such flight.

49 U.S.C. § 1513 (1994).
7

Congress recodified the AHTA and relocated it to § 40116

via Public Law 103-272. Section 1 of that law set forth the new

text:

(b) Prohibitions. Except as provided in subsection (c) of

this section and section 40117 of this title, a State [or]

political subdivision of a State . . . may not levy or collect a

tax, fee, head charge, or other charge on – (1) an individual

traveling in air commerce; (2) the transportation of an

individual traveling in air commerce; (3) the sale of air

transportation; or (4) the gross receipts from that air

commerce or transportation.

(c) Aircraft taking off or landing in State. A State or

political subdivision of a State may levy or collect a tax on

or related to a flight of a commercial aircraft or an activity

or service on the aircraft only if the aircraft takes off or

lands in the State or political subdivision as part of the

flight.

(d) Unreasonable burdens and discrimination against

interstate commerce.

. . . .

(2)(A) A State, political subdivision of a State, or authority

acting for a State or political subdivision may not do any of

the following acts because those acts unreasonably burden

and discriminate against interstate commerce: . . . 

(e) Other allowable taxes and charges. Except as provided

in subsection (d) of this section, a State or political

subdivision of a State may levy or collect – (1) taxes (except

those enumerated in subsection (b) of this section),

including property taxes, net income taxes, franchise taxes,

and sales or use taxes on the sale of goods or services; and

(2) reasonable rental charges, landing fees, and other service

charges from aircraft operators for using airport facilities of

an airport owned or operated by that State or subdivision.
For ease of reference, throughout this opinion we shall call 1

a commercial flight to which a tax relates, the tax’s “subject flight”

(because that flight is the subject of the tax).

8

Pub. L. No. 103-272, § 1(e), 108 Stat. 745, 1111-12 (1994)

(codified at § 40116). Later in the recodification law, Congress

provided: “Sections 1-4 of this Act restate, without substantive

change, laws enacted before July 1, 1993, that were replaced by

those sections. Those sections may not be construed as making a

substantive change in the laws replaced.” § 6(a), 108 Stat. at 1378.

In 1996, Congress proposed an amendment to the AHTA

that would have removed subsection (b)’s reference to subsection

(c) as an “[e]xcept[ion]” to the ban on the four enumerated

categories of taxes. H.R. Rep. No. 104-714(I), at 11, reprinted in

1996 U.S.C.C.A.N. 3658, 3658 (proposing amendment to H.R.

3539, 104th Cong. (1996)). The House and Senate reports

accompanying this proposed amendment called the reference a

“mistake.” H.R. Rep. No. 104-714(I), at 48-49, reprinted in 1996

U.S.C.C.A.N. 3658, 3685-86; S. Rep. No. 104-333, at 28 (1996).

This amendment was never enacted.

IV.

Determining whether a tax passes AHTA muster begins

with § 40116(b). That provision bans four categories of local

taxes: taxes on “(1) an individual traveling in air commerce; (2)

the transportation of an individual traveling in air commerce; (3)

the sale of air transportation; [and] (4) the gross receipts from that

air commerce or transportation.” The ban, however, operates

“[e]xcept as provided in subsection (c),” which states that a

municipality “may levy or collect a tax on or related to a flight of

a commercial aircraft or an activity or service on the aircraft only

if the aircraft takes off or lands in the [taxing locale].” 49 U.S.C.

§ 40116(b), (c).

Suppose a municipality enacts a tax that falls within one of

the four categories enumerated in subsection (b). Suppose the tax

relates to a commercial flight. And suppose that flight arrives in 1
 For ease of reference, throughout this opinion we shall say 2

that a flight that arrives in or departs from the taxing municipality

has a “ground nexus” with the taxing municipality (because that

flight makes contact with – and does not simply fly over – the

taxing municipality).

The petition also presents questions implicating other 3

subsections of the AHTA, other federal statutes, and international

agreements. Because we resolve the case on subsection (c)

grounds, we do not answer those questions.

 For its subsection (c) analysis, the DOT appears to have 4

assumed (without deciding) that Tinicum’s ordinance does indeed

impose a “tax” – and not a “fee” or “charge” – within the meaning

of the AHTA. We do the same.

 Tinicum conceded as much when it admitted that only a 5

savings clause could rescue the tax from condemnation. See App.

141 (arguing that the tax is “permissible because the [AHTA]

provides a specific exception for [it,]” not because it avoids the ban

in the first place (citing, inter alia, 49 U.S.C. § 40116(c)) (emphasis

added)) (Tinicum submission to DOT).

9

or departs from the taxing municipality. Does subsection (c) save 2

the tax from the categorical ban? That is the question presented by

Tinicum’s petition for review, and we answer it in the negative.3

A.

The DOT held that the tax imposed by Tinicum’s ordinance

violates the AHTA. It held that the tax falls within subsection 4

(b)’s categorical ban, and that subsection (c) does not save it. 5

The DOT had before it two competing interpretations of

subsection (c). The industry groups read it to provide that a tax on

a subject flight that lacks a ground nexus to the taxing jurisdiction

cannot pass AHTA muster, regardless of whether the tax falls

within the categorical ban. According to the industry groups,

subsection (c) says nothing about the fate of a tax on a subject

flight that does have such a nexus. Tinicum read subsection (c) as
10

a savings clause providing that a tax on a subject flight that has

such a ground nexus always escapes condemnation at the hands of

the categorical ban (though the tax still, of course, must navigate

the AHTA’s other prohibitions). The DOT held that the industry

groups’ interpretation is the correct one.

The DOT based its decision primarily on the recodification

law. That law declares that § 40116 reenacted § 1513 “without

substantive change,” and Tinicum concedes that § 1513(f) – §

40116(c)’s predecessor – would not have saved the tax. Surely, the

DOT reasoned, Congress could not have intended that language to

accompany a radical revision of § 1513(f), which is precisely what

reading subsection (c) as a savings clause would accomplish. The

DOT also held that reading subsection (c) as a savings clause

would too easily allow a municipality to circumvent the categorical

ban: a municipality could enact a tax belonging to any of the

banned categories so long as it drafted the tax to include a subject

flight having a ground nexus to the taxing jurisdiction – a feature

that arises naturally in local taxes (like those covered by the ban)

on air travel.

The DOT determined, however, that subsection (c), even

when not construed as a savings clause, did not perfectly mesh with

the rest of the AHTA. In particular, it posited that even when not

construed as a savings clause, subsection (c) would conflict with

subsection (b)’s opening clause indicating that subsection (c) is an

“[e]xcept[ion]” to the categorical ban. The DOT solved this

problem by holding that in light of the recodification law’s clear

command, the AHTA should be read as if that offending clause of

subsection (b) were deleted.

Tinicum filed a petition for review of the DOT’s order,

essentially reprising the arguments it made during the

administrative proceedings. First, Tinicum argues that the text of

subsection (c) and subsection (b)’s opening clause indicate that

subsection (c) saves from the categorical ban any tax on a subject

flight that has a ground nexus to the taxing locale. Second,

Tinicum asserts that consulting § 1513(f) to shed light on the

meaning of § 40116(c) is inappropriate, notwithstanding the

recodification law, because Congress could have reenacted the
11

statute’s original language verbatim, but did not. And third,

Tinicum contends that examining the legislative history of the

rejected amendment to remove subsection (b)’s opening clause is

not an appropriate way to determine the meaning of the AHTA that

Congress actually enacted.

B.

We begin our analysis by determining “whether Congress

has directly spoken to the precise question at issue. If the intent of

Congress is clear . . . [we] . . . must give effect to th[at]

unambiguously expressed intent.” Chevron, 467 U.S. at 842-43.

Tinicum contends that the AHTA’s text dictates that subsection (c)

functions as a savings clause, and makes two arguments in support

of its contention.

1.

Tinicum first urges us to focus on the text of subsection (c)

itself. That provision states that a municipality “may” tax a

commercial flight only if the flight has a ground nexus to the

municipality. Tinicum argues that the word “may” indicates a

grant of permission to do whatever act the text immediately

following that word describes. Therefore, Tinicum concludes,

subsection (c) grants a municipality the authority to tax a flight

with a ground nexus to the municipality, notwithstanding

subsection (b)’s categorical ban.

We disagree with Tinicum’s argument. The statutory text

following “may” is “levy . . . a tax . . . related to a flight of a

commercial aircraft . . . only if the aircraft takes off or lands in the

[taxing locale].” § 40116(c) (emphasis added). It is not “levy . . .

a tax . . . related to a flight of a commercial aircraft . . . if the

aircraft takes off or lands in the [taxing locale].” This distinction

makes a difference. See Carver v. Lehman, 558 F.3d 869, 876 n.12

(9th Cir. 2009) (explaining that “[t]he distinction between ‘if’ and

‘only if,’ [] is not a mere quibble over vocabulary”). 

The phrase “only if” describes a necessary condition, not a

sufficient condition. See California v. Hodari D., 499 U.S. 621,
12

627-28 (1991) (explaining that “only if” describes “a necessary, but

not a sufficient, condition”) (emphasis in original). A necessary

condition describes a prerequisite. See id.; Alden Mgmt. Servs. v.

Chao, 532 F.3d 578, 581 (7th Cir. 2008). For example, making the

playoffs is a necessary condition for winning the Major League

Baseball World Series because a team cannot win the World Series

if it does not make the playoffs. Using the “only if” form: a team

may win the World Series only if it makes the playoffs. But, a

team’s meeting the necessary condition of making the playoffs

does not guarantee that the team will win the World Series. 

The word “if” describes a sufficient condition. See Alden

Mgmt., 532 F.3d at 581; cf. Hodari D., 499 U.S. at 628. A

sufficient condition is a guarantee. See Alden Mgmt., 532 F.3d at

581. For example, winning the division is a sufficient condition for

making the playoffs because a team that wins the division is

ensured a spot in the playoffs. Using the “if” form: a team makes

the playoffs if it wins its division.

Subsection (c), by invoking “only if,” describes a necessary

condition. It provides that a tax on a subject flight that lacks a

ground nexus to the taxing jurisdiction cannot pass AHTA muster

(regardless of whether the tax falls within the categorical ban), but

it says nothing about the fate of a tax on a subject flight that does

have such a nexus.

Tinicum’s cases emphasizing the permissive nature of the

word “may” simply are inapposite. They discuss statutes that do

not contain the “only if” connective or similar restrictive language.

See In re New Haven Projects Ltd. Liab. Co., 225 F.3d 283, 286-87

(2d Cir. 2000) (interpreting 11 U.S.C. § 505(a)(1), which provides

that, subject to certain limitations, “the court may determine the

amount or legality of any tax”); Int’l Cablevision, Inc. v. Sykes,

997 F.2d 998, 1005 (2d Cir. 1993) (interpreting 47 U.S.C. §

553(c)(2), which provides that “the court may” grant injunctive

relief, attorney fees, and damages against someone who has

unlawfully intercepted a cable communications service).

We thus reject Tinicum’s argument that the plain text of

subsection (c) indicates that it functions as a savings clause.
 The reason subsection (b) would provide that a tax not 6

falling within an enumerated category is “not necessarily

prohibited” – as opposed to “not prohibited” – is that while

subsection (b) would not itself prohibit such a tax, another AHTA

provision, such as subsection (d), could prohibit it. Therefore, the

most one could glean from reading subsection (b) would be that

such a tax is “not necessarily prohibited.”

13

2.

Tinicum’s second textual argument is more appealing than

its first, but ultimately we reject this one, as well. Tinicum argues

that subsection (b)’s opening clause, by characterizing subsection

(c) as an “[e]xcept[ion]” to the categorical ban, implies that

subsection (c) must save the taxes it describes (namely, those with

subject flights having a ground nexus to the taxing locale). The

DOT concedes this. The DOT argues, however, that the restrictive

text of subsection (c) and the recodification law’s statement that

Congress in § 40116 reenacted the AHTA “without substantive

change” justify reading the statute as if subsection (b)’s opening

clause were deleted.

We disagree with Tinicum’s argument (and believe that the

DOT did not have to make that concession). True, subsection (c)

is an “[e]xcept[ion]” to subsection (b)’s prohibitory regime. That

does not mean, however, that subsection (c) is a savings clause. 

Subsection (b)’s “[e]xcept as provided in subsection (c)” language

makes sense when subsection (c) is construed as a necessary

condition. 

Suppose subsection (c) did not exist. Subsection (b), then,

would be equivalent to the categorical ban standing alone; it would

prohibit only taxes falling within an enumerated category. In

essence, subsection (b) would provide: a tax falling within an

enumerated category is prohibited, and a tax not falling within an

enumerated category is not necessarily prohibited. Now, consider 6

subsection (b) as Congress actually drafted it – with its reference

to subsection (c). It provides: a tax falling within an enumerated

category is prohibited, and a tax not falling within an enumerated
 Our reading has the virtue of preserving each word of the 7

statute’s text, which we must do whenever possible. See, e.g.,

United States v. Atl. Research Corp., 551 U.S. 128, 136-37 (2007)

(rejecting interpretation that would render statutory provision a

“dead letter”).

 We therefore need not address Tinicum’s preemptive 8

counterarguments for why we should not rely on the legislative

history of a rejected amendment to the AHTA or on the language

of the recodification law. We do note, however, that our reading

of subsection (c) is consistent with the recodification law’s

statement that § 40116 does not differ in substance from § 1513.

14

category is not necessarily prohibited, except that a tax on a subject

flight lacking a ground nexus is prohibited even if such tax does

not belong to an enumerated category. The “[e]xcept as provided

by subsection (c)” language meaningfully alters subsection (b)’s

prohibitory regime. 

Subsection (c), then, read as a necessary condition, provides

an exception to the operation of subsection (b)’s prohibitory

regime. We thus reject Tinicum’s argument that subsection (b)’s

plain language requires reading subsection (c) as a savings clause.7

* * * * *

We hold that the AHTA’s text unambiguously demonstrates

that subsection (c) is not a savings clause for flight-related taxes.

Under the applicable Chevron framework, we need not go further.8

V.

For the above reasons, we will deny Tinicum’s petition for

review of the DOT’s order declaring Tinicum’s tax invalid.